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Posts Tagged ‘Ben Bernanke’

Ben Bernanke’s “Hail Mary”

Posted by Larry Doyle on August 29th, 2010 11:12 AM |

Hail Mary passes are typically thrown late in a game in an attempt to clutch victory from the jaws of defeat. Ben Bernanke’s statement at the Fed’s Jackson Hole conference this past week is an indication that he is getting ready to throw his “Hail Mary.”  The problem that I see, though, is that our ‘game’ is only somewhere in the second quarter.

Have you ever witnessed a football game where one team literally has to scrap its game plan because it finds itself in such a huge hole in the first quarter? That, my friends, is analogous to the state of the U.S. economy going into 2008.  While we could debate whether the calls made by our coaching staff in Washington have helped or hurt our recovery, the fact is Ben and his fellow coaches have thrown everything and the kitchen sink at the economy and the results are anything but robust.

For a review of the game to date and the uncertain prognosis going forward, The New York Times’ Peter Goodman provides a wealth of ’sense on cents’ in his fabulous and comprehensive commentary, (more…)

Consumption Takes Another Leg Down

Posted by Larry Doyle on August 23rd, 2010 7:56 AM |

Do you increasingly feel that you are not receiving the full story in terms of our overall economy? Do you feel as if the ‘political class’ in Washington is speaking a different language than the ‘working class’ in the rest of the country? Do you scratch your head as to why economic releases are often immediately panned and quickly thereafter revised? (Case in point, the initial release of 2nd quarter GDP on July 30th was quickly thereafter projected to be halved.) For all of the above reasons, more and more Americans are relying on independent economic research and analysis. Two of my favorites in this camp (aside from Sense on Cents, of course!!) are John Williams of Shadow Government Statistics and Rick Davis of Consumer Metrics Institute.

I recently highlighted Williams’ work in writing, What Is the Real Rate of Unemployment in the United States? In that commentary, I referenced Williams as he had stated:

That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present.

For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in the New York Times and Investors Business Daily, considerable coverage in the broadcast media and a joint meeting with representatives of all the government’s statistical agencies. Despite minor changes to the system, government reporting has deteriorated sharply in the last decade or so. (LD’s emphasis) (more…)

Ben Bernanke Is Running out of Ammo

Posted by Larry Doyle on August 10th, 2010 4:24 PM |

What if you were playing a round of golf with a set number of balls and were restricted by how often you might be able to use specific clubs? Might feel somewhat overwhelmed, no? What if you faced this predicament when you realized that you were still many holes away from the clubhouse? Might feel increasingly overwhelmed, no? Why do I have this mental image of Ben Bernanke and his fellow Fed governors standing out on the farthest point of a golf course wondering just how the heck they are going to finish their round–that is, navigate the economy–and get back to the clubhouse. 

Let’s quickly review the Federal Reserve’s  statement released today. In the process, let’s take the pulse of the economy and  the Fed’s ability to impact it. From the Federal Reserve’s website,   (more…)

G20 and US: Going Separate Ways Highlights Prisoner’s Dilemma

Posted by Larry Doyle on June 7th, 2010 8:25 AM |

As we continue navigating the global economic landscape, national interests are now overwhelming coordinated global interests. How so?

Unlike the coordinated message at the widely publicized 2009 G20 summit held in London, the clashing of widely divergent national views at the 2010 G20 meeting held in Busan, South Korea is hardly melodious. The implications for global markets will be enormous.

Last year, the U.S. swapped all sorts of favors for a coordinated global fiscal stimulus; this year, the U.S., represented by Treasury Secretary Tim Geithner, is receiving the cold shoulder. Finance ministers from around the world are happy to go their own way in pursuit of what they believe to be their national interests. Can you blame them? (more…)

Indict, Prosecute, Convict the Fraudsters…Or Else!!

Posted by Larry Doyle on June 2nd, 2010 1:20 PM |

Has America lost the courage to aggressively address those who commit fraud? Is the American public even aware of the massive fraud perpetrated by those in our financial system which led to our current economic crisis? Are those in Washington willing to take a stand, risk their own skins, call out those engaged in fraud, even if some of the fraudsters occupy neighboring seats at nearby regulatory bodies?

Unless we find people in our government who are willing to make these calls, repeat them publicly in a long, loud fashion, and compel prosecutors to issue indictments, then I fear our union will pay a price and incur a cost that may be immeasurable.

Why so strong? Why so strident? (more…)

European Bank Stress Tests? Nein, Danke!!

Posted by Larry Doyle on June 1st, 2010 8:58 AM |

How do you think the wizards in Washington are feeling about the European bailout structured two weeks ago at their behest? In those two weeks, the Euro has plummeted another 5%, equities continue to suffer, and credit spreads continue to widen.

Our Washington wizards are looking back into their bag of tricks and now recommending another of their ’shell game’ proposals to their European counterparts. Which proposal might this be? How do you spell charade? Try, bank stress tests.

Treasury Secretary Geithner is pressuring European central bankers to perform and release bank stress tests as a precursor to restoring financial health and stability into the European system. The Wall Street Journal highlights Geithner’s recommendation this morning in writing, U.S. to Push Europe on Stress Tests:

The U.S. intends to urge Europe to disclose publicly the results of bank stress tests as a way to calm jitters over the health of the Continent’s financial system, U.S. officials said. (more…)

Finger Pointing and Payoffs

Posted by Larry Doyle on April 9th, 2010 9:12 AM |

Who in America is going to stand up and accept appropriate culpability for his/her contribution to our current economic crisis? Who in America is also willing to expose the incestuous nature of the Wall Street-Washington relationship which provided the cover for the activities which have debilitated our nation?

Let’s review what we have learned so far:

1. Blame has been directed at bank executives…but they got paid handsomely, and have not accepted full responsibility.

2. Blame has been directed at ratings agencies….but they also got paid handsomely to provide ratings, while not really knowing what they were doing. (more…)

Barack Obama Has Ben Bernanke by the Balls

Posted by Larry Doyle on March 16th, 2010 3:32 PM |

Is the White House now in charge of both fiscal and monetary policy?

The Federal Reserve just released its March statement confirming no change in its monetary policy and little change in economic outlook. A brief overview of the Fed’s statement includes the following:

>> Maintains the Fed Funds range at 0-.25% for an extended period.

>> The quantitative easing program used to purchase $1.25 trillion in mortgage-backed securities and $125 billion in federal agency debt is nearing completion at the end of this month. The Fed will monitor economic conditions and employ policy tools as necessary to promote economic recovery and price stability.

>> Economic activity is generally improving. The overall pace of economic recovery is moderate. (more…)

Without Transparency, Financial Regulatory Reform Gets a “D”

Posted by Larry Doyle on March 15th, 2010 9:50 AM |

Bloomberg just provided a sneak peek at the Financial Regulatory Reform package to be proposed by Senator Chris Dodd (D-CT) this afternoon. What are some of the highlights and my thoughts? Let’s navigate.

From the top down, and without being overly cynical, I am extremely concerned that this proposed financial regulatory reform is a reshuffling of deck chairs with increased powers for both the Federal Reserve and U.S. Treasury. The very fears I voiced almost a year ago remain entrenched. What is the basis of my fear? The so-called reform is much more focused on the “sufficiency” of regulation of our financial industry and not nearly focused on the “transparency” of the regulation, the regulators, and the regulated.

Call me suspect.

What are the key highlights as reported by Bloomberg? (more…)

To Wall Street, Washington, and World: “Fool Me Once…

Posted by Larry Doyle on March 11th, 2010 2:08 PM |

…shame on you, fool me twice, shame on me!!!

There are a handful of financial journalists who pull no punches in telling the absolute truth and in providing real transparency. Bloomberg’s Jonathan Weil holds a special spot in the Sense on Cents Hall of Fame for his determination in calling people and institutions on the carpet. From Wall Street to Washington to around the global financial landscape, Weil leaves no stone unturned in promoting integrity. His commentary today is superb. Please share it with friends. Weil writes, Greece Lifts a Page From Citigroup’s Playbook:

Is it too much to ask for the world’s titans of government and finance to speak credibly when they open their mouths? (more…)

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